Third Avenue Management , an investment management company, released its third-quarter 2026 investor letter for the "Third Avenue Small-Cap Value Fund". The letter can be downloaded here . The Third Avenue Small-Cap Value Fund returned -3.31% in Q3 2026, outperforming its benchmark's -4.25%, while remaining strongly ahead year-to-date (17.69% vs. 10.98%). Contributors included PBF Energy, Qualys, Tidewater, ICF International, and Robert Half; detractors included Collegium Pharmaceutical, Octave Specialty Group, MYR Group, Kaiser Aluminum, and Flagstar Bank. The managers remain optimistic about small-cap valuations relative to large caps but emphasize balance-sheet strength, especially as borrowing costs and credit stress rise. They also see financially strong companies as better positioned to pursue acquisitions, buybacks, and other "resource conversion" opportunities. During the quarter, the Fund added Champion Homes and Versigent and continued focusing on undervalued businesses with recovery potential and durable competitive advantages. Also, check the Fund's top five holdings to see its best picks for 2026.
In its Q3 2026 investor letter, Third Avenue Small-Cap Value Fund highlighted PBF ENERGY INC. (NYSE:PBF) as a leading contributor. PBF Energy Inc. (NYSE: PBF ) is an independent petroleum refiner and supplier that produces unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants, and other petroleum products. On October 30, 2026, PBF Energy Inc. (NYSE:PBF) closed at $78.00 per share with a market capitalization of $9.25 billion. Despite a 7.32% pullback over the past month, PBF Energy Inc. (NYSE:PBF) has delivered a remarkable 122.29% gain over the last 52 weeks.
Third Avenue Small-Cap Value Fund stated the following regarding PBF Energy Inc. (NYSE:PBF) in its Q3 2026 investor letter:
"During the third quarter, Fund performance benefited from diversified sources of return. Leading contributors to performance included petroleum refiner PBF Energy Inc.(NYSE:PBF). The single largest contributor to Fund performance for the quarter was PBF Energy. At the time of the Fund's initial investment, roughly two years ago, we held the view that PBF's assets, and U.S. refinery assets in general, were at that time earning well below normalized margins and returns. We believed that, given the absolutely critical nature of the assets and a wave of U.S. refining capacity closures in recent years, there was a high probability that the economics of that industry would eventually rise to a level at which reinvestment to maintain the production capacity of the remaining refinery assets could be economically justified…" ( Click here to read the full text )
PBF Energy Inc. (NYSE:PBF) is not on our list of the 40 Most Popular Stocks Among Hedge Funds . As per our database, 48 hedge fund portfolios held PBF ENERGY INC. (NYSE:PBF) at the end of the second quarter, which was 47 in the previous quarter. While we acknowledge the risk and potential of PBF Energy Inc. (NYSE:PBF) as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than PBF that operates as a critical AI tollboothand stands as the most important company in the world, check out our report about this must-own AI stock .
In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
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This article is originally published at Insider Monkey .
